The best index funds for beginners are broad, cheap and boring. They own thousands of companies, charge very low fees, and let you invest without picking stocks. Here are popular choices for US investors, plus what to look for in the UK and Canada.
What makes a good index fund
- Low cost: an expense ratio under about 0.10% a year for US funds
- Broad: hundreds or thousands of companies, not one sector
- Large and well known: tracks a major index with a long record
Popular US index ETFs
- VOO, Vanguard S&P 500 ETF (0.03%): the 500 largest US companies. Compare it with its rivals in VOO vs SPY vs IVV.
- VTI, Vanguard Total Stock Market ETF (0.03%): nearly the whole US market, including small and mid-size companies.
- VXUS, Vanguard Total International Stock ETF (0.05%): companies outside the US, to pair with VOO or VTI.
- VT, Vanguard Total World Stock ETF (0.06%): the whole world in one fund, a simple one-ticket choice.
- SPYM, State Street SPDR Portfolio S&P 500 ETF (0.02%): a very low-cost S&P 500 option.
- BND, Vanguard Total Bond Market ETF: US bonds, to add stability as you get closer to needing the money.
Expense ratios as reported in 2026 and can change. Check the fund provider’s site before you buy.
Simple portfolios
- One fund: 100% VT
- Two funds: about 70% VTI and 30% VXUS
- Three funds: VTI, VXUS and BND, with more bonds the closer you are to retirement
In the UK and Canada
UK investors usually buy UCITS versions of global or S&P 500 trackers inside a stocks and shares ISA, since many US-listed ETFs are not available to UK retail investors. See how an ISA could grow with our ISA calculator.
Canadian investors often use all-in-one ETFs from Vanguard, iShares or BMO inside a TFSA or RRSP. Note that US dividends in a TFSA lose 15% to US withholding tax.
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Frequently asked questions
Is an S&P 500 fund enough?
It gives you 500 large US companies, which many investors are happy with. Adding an international fund spreads your risk beyond one country.
ETF or mutual fund?
Both can work. ETFs trade like stocks and are easy to buy at most brokers. Index mutual funds can make automatic monthly investing simpler at some providers.
How much do I need to start?
Many brokers let you buy fractional shares, so you can start with a few dollars. Read our how to start investing guide for the first steps.
This article is general information, not investment advice. Past performance does not guarantee future returns.
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